Just Eat Takeaway.com N.V.

Hello and welcome to the Just Eat Takeaway.com Q3 2024 Trading Update. My name is Caroline and I'll be your coordinator for today's event. Please note this call is being recorded and for the duration of the call your lines will be on listen only mode. However, you will have an opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to register your questions. If you require assistance at any point, please press star 0 and you'll be connected to an operator. I will now hand over the call to your host, Jitse Goen, the CEO, to begin today's conference. Thank you.

Thank you, operator. Good morning and welcome to this analyst and investor conference call to discuss the first quarter 2024 trading update. On our corporate website, you can download the press release and the slides for this analyst and investor conference call. Given we issued a trading update only, today's presentation will be kept brief, after which we will open up the call for your questions. Maite Oosterveld, Joerg Gerbig, and Andrew Kenney are also here to provide answers. Regarding the question and answer session, as a reminder, we would like to request that each analyst only ask one question, and to manage your expectations, given this is a trading update, we won't be able to comment on financial metrics for 2024. On the following slides, I will provide more details, but the key messages for today's update are that we made further progress across our key strategic pillars, that constant currency GTV growth excluding North America was 2% in the first quarter of 2024, that we saw an improved exit rate for GTV growth following a slower July, that we reiterated our guidance for 2024, and lastly, that we have so far repurchased a combined €340 million under the free share buyback programs that we have launched in the past 18 months. If you would please follow me to slide three. We have made further progress across our key strategic pillars, which we believe will drive future growth. While the majority of our business is already growing, the group is also getting closer to that point. Let me be clear, our ambition is to not only be highly profitable, but also to grow. We therefore focus our efforts on free cash flow generation, growth, and portfolio. Our base is sound. We have strong market positions, a loyal and in many countries growing customer base, a growing estate of partners, and a healthy financial position. We've added almost 50,000 net partners this year so far, including circa 20,000 net grocery and retail partners. And we have, for instance, ramped up our investments in the UK and Ireland, but also in Germany. We also now enjoy 30% more visibility, correlated with the increase of matches in UEFA Champions League. While we have a clear strategy to enable growth, we do want to go faster. Cash is what fuels our ambition to grow, and we will therefore continue to free up further cash. We are continuously reviewing our cost base and our portfolio, and we are able to invest to make our business better. We will be on one European platform by the end of the year. This will increase our ability to service supply. It will allow us to launch Just Eat Plus, our subscription program, but it will also drive costs down. It will improve the overall user experience, accelerate innovation, and significantly improve speed to market of new product features. We've identified lots of opportunities to be more efficient as a business. We will continue to automate and simplify our processes, for instance, to provide seamless and efficient customer care. Many of the changes now and in the future will be AI driven. Our logistics capabilities are constantly improving with speed of delivery going up and cost per order going down. We will further improve the efficiency of our logistics, for example, with the simplification of the delivery models in the UK, but also with product improvements. Delivering Europe, for instance, today is much faster than what it was last year. We will also reduce the amount we spend on third-party suppliers and facilities, and we will set up ourselves to be more efficient and to focus on the right things for our business. These costs and operational efficiencies have already allowed us to increase investments while maintaining our financial outlook, and we foresee many more benefits in the Maite will speak in more detail about a strategy to further optimize our cost base to reinvest in the business at the full year 2024 results publication in February. Moving to the next slide. Well, you can see that we continue to have strong momentum in our Northern European and Yukon Island segments. As a reminder, these two segments in aggregate represent circa 60% of group orders and have now been growing consistently for over a year. which is obviously very encouraging, despite the macroeconomical situation of the countries in which we operate. In Northern Europe, we delivered a year-on-year constant currency GDP growth of 3% in the third quarter of 2024, of 4% on a reported basis. We have continued to invest in expanding our logistics network across Northern Europe, enabling us to serve more consumers with a wider choice of partners, including a wide variety of supermarkets, cosmetics, and electronics. We are excited to have partnered with REWE and now are the only food delivery business in Germany with a nationwide 30-minute grocery delivery service. Enhanced supply and choice will remain to be a key driver for increased order frequency and consumer loyalty. In the UK and Ireland segment, reported GTV growth was 6% to 4% in constant currency in the first quarter. This growth was in part supported by the continued momentum of our grocery and other adjacencies business across the UK, with recently having announced partnerships with Waitrose, HelloFresh, Boots, and Cart Factory, to name a few. Operationally, we continue to benefit from ongoing improvement in our logistics business, helping to support margin expansion while maintaining healthy levels of investment in price and marketing. On the right side of the page, CNs are smaller segments You can see that while the year-on-year growth continued to be negative, GTV has stabilized when looking at the quarter-by-quarter development. Moving to slide five. On the left side of the page, the graph indicates GTV growth for the group, excluding North America. On a constant currency base, our GTV grew by 2% in the first quarter. On a reported basis, growth was 3% year-on-year. In the first nine months of 2024, the constant currency DTV growth excluding North America was 3% year-on-year within the guided range of 2% to 6% DTV growth for the full year. On a reported basis, year-on-year growth was 4%. As mentioned in the key messages, the quarter started with a slower July across all segments. However, both August and September were stronger with year-on-year growth rates above the level we reported in the first half of the year. In the North America segment, the year-on-year growth continued to be negative. There were, however, many improvements made to this business, and Grubhub, meanwhile, continues to make progress towards free cash flow breakeven. To conclude this slide, GDP for the group, including North America, was down 3% in the third quarter of 2024 versus the same period last year, both on a reported as well as on a constant currency basis. On the next slide, We summarized the combined results of the free share buyback programs we launched in the past 18 months. Under these three programs combined, we have so far repurchased 340 million worth of shares, representing approximately 25 million shares at an average price of €13.67. The third 150 million buyback program launched in July and is now 26% completed, which implies that there is another 110 million to be repurchased until completion. In addition, following the completion of a legally mandated objection period of two months, last week we cancelled 5% of the issued shares to reduce the number of issued shares outstanding. Moving to the last slide of the presentation where we reiterate our guidance for 2024. We expect constant currency GTV growth excluding North America to be in the range of 2% to 6% year-on-year. In the first nine months of 2024, the constant currency GDP growth excluding North America was 3% year-on-year or 4% on a reported basis. We remain focused on profitability and expect to deliver an adjusted EBITDA of approximately €450 million. In line with the top-line growth trajectory and normal seasonality of our business, we expect adjusted EBITDA generation to be back-end loaded towards the second half of this year. We expect free cash flow before changes in working capital to continue to be positive in 2024 and thereafter. And to conclude this slide, we reconfirm our long-term target of group-adjusted EBITDA margin in excess of 5% of GTV. This concludes the brief presentation. So, operator, can you please open the call for questions?

Sure. Thank you. As a reminder, if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. We will take the first question from line Monique Pollard from City. The line is open now. Please go ahead.